Pension Reform Debate Clears First Obstacle In Springfield [UPDATE]
By Chuck Sudo in News on Dec 3, 2013 9:20PM
Update 5:04 p.m.: That was quick, both houses of the Illinois Legislature passed the pension reform bill. The Illinois Senate passed the bill by a 30-24 vote while the House passed the bill on a 62-53 vote; with one representative voting and three senators voted “present.”
The bill now goes to Gov. Pat Quinn for approval. Quinn has been noticeably silent on this and if he vetoes the bill could set the stage to test the veto-proof majorities Democrats hold in both houses of the Legislature.
The We Are One coalition released a statement after the vote calling on Quinn to veto the bill:
"This is no victory for Illinois, but a dark day for its citizens and public servants.“Teachers, caregivers, police, and others stand to lose huge portions of their life savings because politicians chose to threaten their retirement security, rather than pass a much fairer, legal, negotiated solution in Senate Bill 2404.
“It’s bitterly ironic that, on the same day legislators used the state’s troubled finances to justify stealing the retirement savings of public servants, they approved millions of dollars in new tax giveaways for big corporations.
“A majority of legislators ignored and defied their oaths of office today—but Governor Pat Quinn doesn't have to. He can stay true to his oath and the legal promise made to public employees and retirees by vetoing this unfair, unconstitutional bill. If he doesn't, our union coalition will have no choice but to seek to uphold the Illinois Constitution and protect workers’ life savings through legal action."
Lawmakers on both sides of the political aisle in the Illinois Legislature had a rare moment of cooperation and furthered the proposed pension reform deal negotiated by the state’s top political leaders last week. With three of the four principals at the Capitol for the debate, a special legislative conference committee approved the bill, meaning the legislation may now move to the floors of the Illinois House and Senate for debate.
House Speaker Michael Madigan called Illinois’ nearly $100 billion underfunded pension liability “too rich” for the state to afford. “We lead,” Madigan said, “but not in the category we wish to lead.” Illinois’ underfunded pensions are the worst in the nation.
The plan negotiated by Madigan, Senate President John Cullerton, State Rep. Tom Cross and House Minority Leader Jim Durkin calls for a hike in the retirement age for state workers currently age 45 or younger; a reduction in cost of living allowances using a formula based on how long a worker held their job and only toward a portion of their pension; prohibiting state pension systems from using pension funds to pay healthcare costs; removing all pension matters from collective bargaining talks except pension pickups; reduce employee salary contributions to their pensions by 1 percent; and for the state to contribute $364 million in funding in 2019 and $1 billion every year thereafter until 2045 or until the pensions are fully funded. The cuts are expected to save the state $160 million over the next 30 years.
While the bill has found Democratic and Republican lawmakers largely in agreement for the first time in seemingly forever, it will face a major challenge by the state’s labor unions and some politicians aren’t on board. Venture capitalist Bruce Rauner and Illinois Treasurer Dan Rutherford, both GOP gubernatorial hopefuls, oppose the bill. So does Lt. Gov. Sheila Simon, who said the deal “puts too much of the burden on lower income workers and retirees.”
“I appreciate the requirement that the state pay its share, but the legislation should be made more fair for those who have worked and earned their pensions, ” Simon said. “Many state workers have had no opportunity to contribute to Social Security, and a small pension that does not keep up with inflation is a recipe for poverty.”
Dan Montgomery of the Illinois Federation of Teachers agreed. While he acknowledged pension reform is sorely needed he told the Tribune some of the cuts are too deep. “We call it theft,” Montgomery said.